In general, a “supply chain” relates to the flow of goods, services, and/or associated information from a source to a consumer. The supply chain may include various entities, any one or combination of which are, for example, capable of: receiving an order from a consumer; processing the order; managing payment for the order; determining the resources needed to fulfill the order; determining a course of action to fulfill the order; managing the flow of and/or distributing information regarding the order; managing resources needed to fulfill the order; manufacturing and/or integrating components of the order (e.g., assembling the parts of an ordered good); distributing the ordered good and/or service to the consumer; and forecasting needs and sales of future orders based on previous orders. Those skilled in the art will note that distributing responsibilities and functions over various entities in a supply chain may result in overall or targeted cost savings, improved order processing efficiency (e.g., improved delivery times), and/or improved quality of ordered goods and services.
FIG. 1 shows a typical supply chain 5. Order flow in the supply chain 5 generally begins when a consumer 10 places an order with a retailer 12. The retailer 12 may be a “brick-and-mortar” store or an “online” outfit accessible via the Internet. The retailer 12 receives the order from the consumer 10, checks the order for errors, and ensures payment for the order. Payment for the order may occur through direct payment at the time the order is placed, payment based on a line of credit established for the consumer 10, or charge for the order at the time the order is fulfilled and shipped to the consumer 10.
The retailer 12, based on the placed order, forwards the order to a manufacturer 14. The manufacturer 14, based on the needs of the placed order, either uses “on-hand” parts or obtains them from any one or more of parts suppliers (e.g., wholesalers) 16, 18, 20. Upon manufacture of the ordered good, a distributor 22 delivers or causes the delivery of the ordered good to the consumer 10.
Further, as discernible from FIG. 1, information regarding the placed order and status thereof may be distributed in any variation across the entities shown in FIG. 1. For example, the distributor 22 may inform the retailer 12 when the ordered good is shipped to the consumer 10.
Managing the flow of goods, materials, services, and/or associated information in a supply chain, such as that shown in FIG. 1, is referred to as “supply chain management” (SCM). In general, supply chain management involves managing the design, planning, execution, control, and monitoring of processes and activities of a supply chain. Such management is generally performed with the objectives of, for example, reducing inventory, increasing delivery times, reducing costs, increasing sales, synchronizing supply with current and forecasted demand, and/or increasing overall order processing efficiency.